Three ways companies change their products to hide inflation

Consumer price inflation in the U.K. slowed for the first time in nearly a year in August. A fall in petrol prices helped slow the overall rate but food prices continue to rise rapidly. But even with a slowdown to 9.9%, from ...

Unraveling a mystery surrounding cosmic matter

Early in its history, shortly after the Big Bang, the universe was filled with equal amounts of matter and "antimatter"—particles that are matter counterparts but with opposite charge. But then, as space expanded, the universe ...

Inflation of online ratings can be beneficial and detrimental

Many adults consult online ratings and reviews before they make a purchase. However, how ratings affect sales is a challenging topic as evidenced from controversy surrounding Rotten Tomato scores or sellers trying to manipulate ...

Slowdown in inflation buoys consumer sentiment

Consumer sentiment rose by 13% in August, lifting off of the all-time low reading for the survey reached in June but remaining 17% below a year ago, according to the University of Michigan Surveys of Consumers.

Black households suffer the most from rising inflation rates

Black households in the U.S. faced higher and more volatile inflation compared to white households from 2004 to 2020, reveals new research from the University of California San Diego's School of Global Policy and Strategy. ...

How inflation is influencing the way we think and behave

Driven largely by soaring gas prices, inflation reached levels not seen in decades over the last year, according to new Consumer Price Index data. Prices at the pump helped accelerate inflation to 8.6% for the 12 months ending ...

Wages: Why are they not keeping up with inflation?

There has been a huge amount of concern about rising inflation in recent months, and it's made worse by the fact that wage inflation has not been keeping up. A few workers in high-paid jobs have enjoyed higher bonuses and ...

Gasoline costs and the effects of suspending gas taxes

Gas prices are spiking these days—well over $4 a gallon—and several states have temporarily lifted their gas taxes to give consumers some price relief. But how high are today's gas prices, if we adjust for inflation? ...

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Inflation

In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy. A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time.

Inflation's effects on an economy are various and can be simultaneously positive and negative. Negative effects of inflation include a decrease in the real value of money and other monetary items over time, uncertainty over future inflation may discourage investment and savings, and high inflation may lead to shortages of goods if consumers begin hoarding out of concern that prices will increase in the future. Positive effects include ensuring central banks can adjust nominal interest rates (intended to mitigate recessions), and encouraging investment in non-monetary capital projects.

Economists generally agree that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply. Views on which factors determine low to moderate rates of inflation are more varied. Low or moderate inflation may be attributed to fluctuations in real demand for goods and services, or changes in available supplies such as during scarcities, as well as to growth in the money supply. However, the consensus view is that a long sustained period of inflation is caused by money supply growing faster than the rate of economic growth.

Today, most mainstream economists favor a low, steady rate of inflation. Low (as opposed to zero or negative) inflation may reduce the severity of economic recessions by enabling the labor market to adjust more quickly in a downturn, and reduce the risk that a liquidity trap prevents monetary policy from stabilizing the economy. The task of keeping the rate of inflation low and stable is usually given to monetary authorities. Generally, these monetary authorities are the central banks that control the size of the money supply through the setting of interest rates, through open market operations, and through the setting of banking reserve requirements.

This text uses material from Wikipedia, licensed under CC BY-SA